FINANCIAL PLAN

The financial plan of this business plan would include three main aspects which are the Income
Statement, Balance Sheet and the Cash Flows. As a matter of fact as this business plan is a start-
up hypothetical situations are being taken into account and assumptions are made. However in
order to make the Income Statement, Balance Sheet and the Cash Flow it is important to consider
the aspects of cost of materials which will be bought which are the raw material in order to
produce the product. This part will also elaborate on the cost of material which are being
purchased and the selling price of products keeping some amount as profit for the company. The
general assumptions made for the whole financial plan are as follows:

GENERAL ASSUMPTIONS

1. Depreciation charge is 10%

2. Miscellaneous expenses increase by 5% every year
3. Accounts receivables are 3% of Cost of Sales of service
4. Trade Payables are 20% of Cost of service sold

ASSUMPTIONS FOR INCOME STATEMENT

1. The utilities include electricity bill, gas bill and water bills
2. The delivery expenses will be covered by the consumer or the customer.. The cost of
different areas will be:
Defence Housing Authority: Rs.100
Clifton till Saddar: Rs.150
3. The additional charges of packing will include Rs.100 otherwise the packing is included in
the cost
4. The miscellaneous expenses will include insurance cost of Rs.15, 000 and other expenses
which occur due to operational procedures
5. Half of the expenses are in the balance sheet and the rest half are adjusted in the cash flows

ASSUMPTIONS FOR BALANCE SHEET

1. Equipment is bought the first year and 3rd year with the amount of about 105000 in 1st year
and 35000 in third year
2. The depreciation is 10% as total
3. 3% of the sales is account receivable
4. 90% of accounts receivable will be adjusted in the cash flows
5. 20% of accounts payable is in the balance sheet
6. 90% of the account payable is adjusted in cash flows

ASSUMPTIONS FOR CASH FLOW STATEMENT

1. The 90% of the accounts receivable are adjusted in the cash flow statement
2. The 90% of the accounts payable are adjusted in the cash flow statement

BREAK EVEN ANALYSIS

The break even analysis is the point where the profit earned by the company is equal to the loss
which means profit is equal to the loss. The break even for this business plan is done for three
products in total. However in order to take the break even by sales volume there could have been
the aspect of dividing all the three products by composite and taking out a different composite
for each product. This would have been complex keeping the fact that the business is a start-up.
The aspects which are analysed in the following table includes the breakeven point and break
even by sales unit.

The break even has been calculated for the three years of the business which includes the year of
2017, 2018 and 2019. The number of units for 2017 is 1200, for 2018 it is 1500 and for 2019 it is
2000.